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Will He Retire? What to Watch for as Li Ka-shing Faces the Press

(Bloomberg) -- Billionaire Li Ka-shing will be holding his annual press conference on Friday. Though his companies are big -- flagship CK Hutchison Holdings Ltd. is the largest local non-financial company by market value on the Hang Seng Index -- the focus often shifts beyond earnings and veers toward subjects ranging from the 89-year-old tycoon’s retirement plans to his latest views on markets and politics.

Below is a list of topics that analysts and investors will be looking out for during the typically jam-packed event.

Turning 90 in July

Given Li’s age -- Amelia Earhart had just become the first woman to fly across the Atlantic when he was born -- questions about his eventual retirement have been on the rise in recent years. When the day comes, it will mark the end of an era. Li has been a fixture as the richest man in the city -- and often Asia -- for an entire generation of Hong Kongers who’ve called the tycoon "Superman" for his business acumen.

What’s different this year is that Li’s four biggest companies -- CK Hutchison, CK Asset Holdings Ltd., CK Infrastructure Holdings Ltd. and Power Assets Holdings Ltd. -- will be reporting on the same day for the first time. Representatives at Li’s companies didn’t say whether the matching dates are a coincidence or whether they point to something of deeper significance.

As momentous as it would be, a Li resignation would hardly be surprising after the tycoon in 2012 named his elder son Victor as heir to an empire spanning more than 50 countries in businesses ranging from retail to telecommunications and utilities. In a rare interview in 2016, Li told Bloomberg Television that those worried about succession should note that his son had been working alongside him for 30 years and been taking care of his businesses full-time for the past few years. As Castor Pang, head of research at Core-Pacific Yamaichi Hong Kong, put it: a resignation would "just be an official announcement" of plans that have been prepared for a long time.

Fund managers such as Alex Wong, Hong Kong-based director of asset management at Ample Capital Ltd., said markets have also been preparing for that eventuality. "Concerns about his retirement from investors are very limited," he said

Can Property Prices Keep Climbing?

As in past years, Li is likely to be asked about his latest views on the property market, which is showing no signs of cooling despite Hong Kong already being infamous for being the least affordable city in the world. Li recently cashed in when his main property company, CK Asset, agreed to sell a local skyscraper for a record $5.2 billion. Some investors anticipate more building disposals will come amid a hot Hong Kong property market.

A number of commercial buildings in Li’s property portfolio are worth billions of dollars, including Hutchison House and China Building in the city’s prime Central district.

Secondary house prices in Hong Kong have climbed 4 percent this year, according to Centaline, and have surged more than 400 percent since their 2003 trough.

Li’s comments may be particularly timely as investors scrounge for clues as to how prices will react when interest rates start rising, according to Matthew Kwok, managing director at China Goldjoy Asset Management Ltd.

Infrastructure, Power M&A Outlook

Investors will be on the lookout for any signs that CK Infrastructure and Power Assets will revive plans to merge after minority shareholders blocked such a proposal in 2015. According to Daiwa Securities Group Inc. estimates in January, a combined CKI and Power Assets would create a global infrastructure giant with at least HK$300 billion ($38 billion) in market value and free up the group to pursue acquisitions. Power Assets has money -- the company sat on HK$41.9 billion in cash, equivalents and liquid short-term investments as of June, or 35 percent of total assets.

Power Assets Special Dividend?

One gripe investors have had with Li has been with the tycoon’s dividend payments, or lack thereof. The latest example came last month, when Hutchison Telecommunications Hong Kong Holdings Ltd. plunged as much as a record 16 percent on Feb. 27 after the company said that proceeds from its sale of fixed-line assets last year wouldn’t be used to pay out a special dividend for now.

Prior to that, Li’s Power Assets had for years resisted calls to bolster shareholder returns through dividends after collecting a HK$53 billion bounty from a share sale. Last year, the company eventually paid shareholders with its first special dividend in more than a decade.

Energy, Telecoms to Boost CK Hutchison Profit

Then there are the earnings themselves. All four companies are expected to post profit increases for 2017, according to analyst estimates compiled by Bloomberg.

CK Hutchison will likely report net income rose about 5 percent in 2017 because of higher returns from its Husky Energy unit and increased earnings from its European telecommunication operations, according to estimates compiled by Bloomberg. Meanwhile, underlying profits at CK Assets are projected to have risen 14 percent, helped by higher property sales and contributions from units in Australia, Canada and Germany.